If you’re a landlord or property investor in the UK, here’s something that should grab your attention: the government is facing a £22 billion gap in public finances. History shows that when there’s a shortfall, property owners often feel the pinch first.
So, what does that mean for your rental income, portfolio, and future profits? Let’s break it down in plain English: no financial jargon, just what you need to know.
Section 24, Stamp Duty, and Capital Gains: What You Need to Know
Over the past few years, property investors have faced a bunch of tax changes, including:
• Section 24 Mortgage Interest Restrictions: You can no longer deduct all your mortgage interest from your rental income.
• Higher Stamp Duty: If you buy additional properties, you’re paying more upfront (it’s 3–5% extra now).
• Capital Gains Tax Increases: Selling a property can cost more in tax than it used to.
• Reduced Wear and Tear Allowances: Furnished rental properties aren’t getting the same tax breaks anymore.
And that’s just what’s happened so far. With the economy uncertain and government debt high, no one really knows what’s coming next.
What Future Changes Your Portfolio is Exposed To:
• Higher corporation tax
• New property wealth taxes
• More stamp duty increases
• Inheritance tax changes
• Capital gains tax alignment with income tax
The truth is, your property portfolio is exposed to whatever the government decides next, and that can feel scary if you’re not prepared.
Holding Companies: A Smart Way to Protect Your Property Profits
One solution that savvy investors have been using for decades is a holding company structure. Here’s why it matters:
• Corporation Tax Benefits: Even if rates rise, corporation tax is usually lower than personal income tax.
• Flexibility: Companies are easier to restructure if tax rules change.
• Professional Status: Lenders and the government treat companies differently, often more favourably.
• Inheritance Planning: You can gift shares more efficiently than passing on individual properties.
Basically, it’s about being proactive rather than reactive. The investors who come out on top aren’t the ones scrambling after the rules change, they’re the ones planning.
Plan Ahead: Don’t Let Government Tax Changes Eat Your Profits
At Sourced Enterprise, we help property investors structure their portfolios in ways that protect profits and make scaling easier. With the right setup, you can navigate tax changes and grow your property business with confidence.
Bottom line: Don’t wait until the government changes the rules again. Planning now can save you a lot of stress, and money, later.
Author
Chris Kirkwood
